The Steady Optimist Who Oversaw G.M.’s Decline

Monday

Despite many challenges to his leadership, Rick Wagoner had managed to keep a firm grip on his job, until now.

DETROIT — In recent years, despite many challenges to his leadership of General Motors, Rick Wagoner had managed to keep a firm grip on his job, like hands wrapped tight around a steering wheel.

During his tenure as chief executive, beginning in 2000, the company’s stock has fallen from $70 a share to less than $4 now, and its market share has fallen roughly 10 percentage points.

There have been many challenges to his authority, most notably from the investor Kirk Kerkorian in 2006 and from angry members of Congress during hearings last fall. Throughout the attacks, he had managed to retain the unwavering support of his board.

For a time, it seemed he might become the rare chief executive who gets another chance, this time to try to fix many of the problems that occurred on his watch.

But he appears to have met his match in President Obama, whose calls for sacrifices from all sides apparently included a call for Mr. Wagoner to step down.

On Sunday, Mr. Wagoner agreed to the suggestion by the Obama administration that he resign and let somebody else steer G.M.

During his nine years in charge, Mr. Wagoner never appeared to waver from his determination that G.M. would reclaim its spot as the unrivaled leader of the auto industry, despite steadily falling sales.

Through three major restructuring plans enacted on his watch — eliminating dozens of plants, tens of thousands of jobs and jettisoning hundreds of dealers — Mr. Wagoner maintained a stolid confidence in himself and the company’s strength. Only recently did he acknowledge the need to significantly pare the company’s brand and model lineup, to better match the company’s bloated infrastructure with the shrinking market.

Only at the second round of Congressional hearings last fall did Mr. Wagoner start agreeing that the company had made mistakes, and that its problems were not all attributable to outside forces like the weakening economy and tightening credit markets.

Mr. Wagoner joined G.M.’s financial operations in 1977 out of Harvard Business School, and, like generations of executives before him, worked nowhere else during his career.

Mr. Wagoner vaulted into Detroit’s consciousness in 1992 upon another resignation during a financial crisis — that of Robert C. Stempel, the chief executive at G.M. at the time.

Then only 38, Mr. Wagoner became G.M.’s chief financial officer. Two years later, he was named president of its North American operations.

His mentor, the chief executive John F. Smith Jr., named Mr. Wagoner president of G.M. in 1998, and he succeeded Mr. Smith in the top job in 2000.

Like Mr. Smith, Mr. Wagoner aggressively expanded G.M.’s operations outside the United States. The company now sells 65 percent of its vehicles overseas, thanks to Mr. Wagoner’s push into markets like China, Russia and Latin America.

However, G.M.’s sales slump at home led to it losing its longtime title last year as the world’s largest auto company, replaced by Toyota.

“It’s a pretty unceremonious ending,” said John Casesa, an industry analyst and managing partner of the Casesa Shapiro Group. “G.M. lost its way in the ’70s, but the company didn’t know it until 20 years late. The hole was much deeper than he realized when he became C.E.O.”

And, Mr. Casesa said, Mr. Wagoner’s finance background might have been a poor fit: “The most successful auto companies are run by people who came out of the revenue-generating functions — manufacturing, design, marketing — making cars and selling cars.” Mr. Wagoner, the analyst said, “skipped the whole apprenticeship that most auto C.E.O.’s experience.”

Mr. Wagoner presided over some of the biggest losses in G.M. history. In 2002, the company had predicted that it would earn $10 a share by the middle of the decade.

Instead, G.M. lost $30.9 billion in 2008, when its per-share loss translated to more than $50 a share. G.M. stock, an economic bellwether that sold above $35 only three years ago, closed Friday at $3.62; it has fallen as low as $1.27 in the last year.

In 1994, when he took charge of G.M.’s North American operations, the company made up 33.2 percent of auto sales in the United States.

Last month, G.M. represented only 18.8 percent of American car and truck sales, according to statistics from Motor Intelligence, which tracks industry data.

Under pressure to stop G.M.’s sliding market share, Mr. Wagoner hired Robert A. Lutz, a longtime auto industry executive, in 2002. Mr. Lutz reorganized G.M.’s product development operations, and introduced a number of new vehicles, including sporty models like the Pontiac Solstice and Saturn Sky.

Both Mr. Lutz, who had previously announced his plans to retire by year’s end, and Mr. Wagoner have championed the Chevrolet Volt, a plug-in hybrid electric car that G.M. plans to introduce in late 2010.

Mr. Wagoner has said that one of the moves he regretted most was G.M’s decision to kill the EV-1, an electric car that it leased to customers in the late 1990s. Although the vehicle was not profitable, it helped G.M.’s image with environmentalists, which in 2006 Mr. Wagoner conceded he had understood too late.

Only six months ago, Mr. Wagoner stood in front of hundreds of G.M. employees in the atrium of the company’s Detroit headquarters, celebrating the automaker’s 100th anniversary.

Dressed in a gray suit and a yellow, blue and white striped tie, Mr. Wagoner said: “So, what’s our assignment for today and tomorrow? Above all, it’s to demonstrate to the world that we are more than a 100-year-old company. We’re a company that’s ready to lead for 100 years to come.”

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